Alternative Credit Scoring of Underbanked Consumer

This Proof of Concept outlines a solution that undertake other means of assessing the credit score of underbanked consumers by analyzing their smartphone data to draw predictive behavioral insights.

1. SME supply chain financing solution on
blockchain distributed ledger technology
(DLT)
Leading-edge tech capabilities
Blockchain solution for supply chains
Supply chain financing challenges faced by SMEs
Double financing
due to information
asymmetry
Difficult to validate
transactions,
providing an avenue
for money laundering
Low visibility as
inputs are localized
in companies’
internal databases
Trust and
communication
issues due to a
lack of system
integration
Scalability issues
since system
integration is
mostly centralized
Unnecessary and
duplicate
procedures
3. V-value placed in
escrow and smart
contract updated
5. Performance
completed; smart contract
release V-value to supplier
Seller and buyer create their own
trust system by agreeing on the
performance parameters under
the smart contract:
•Eliminates buyer’s concern on
seller performance
•(Eliminates seller’s concern on
buyer repayment risk
Cryptographically
secured
Distributed ledger
technology
Hyperledger fabricSmart contracts
Benefits of proposed solution
Real-time information
exchange
Ensures data validity
Streamlined workflows
Eliminates errors and
risks
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3
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Context: Alocal SME has been seeking
innovative ways to revolutionize the trade
finance industry.
Recommended configuration:
•This blockchain solution is ideal for
SMEs that are facing trade financing
challenges in the area of supply chains.
•The key modules include creating a
trusted transaction system and smart
contract for transfer of value.
•It aims to establish an immutable audit
trail to keep accurate records of trade
and finance interactions, traceable
invoice milestones retrievable for data
verification, and invoice status
verification by partner lenders added
as validating nodes to a distributed
ledger network.
•This will ultimately lead to creating
trust in “trustless” supply chain
networks.
Case study
Client impact:
• Created a new trust system within the
trade finance ecosystem
• Mitigated the risk of fraud or errors
• Improved the corporate social
responsibility (CSR) by improving cash
flow and sustainability for SMEs’
suppliers
• Provided easy tracking of transactions
with the blockchain technology
Varun Mittal
Global Emerging Markets
FinTech lead
[email protected]
Contact us
FinTech Hub
www.ey.com/sg/FinTechHub